A lot of people are facing financial difficulties in the wake of the Covid-19 pandemic.
At MoneySuperMarket, we know a change to your financial situation can be even more stressful if you have debts to pay off.
But even if you can’t afford your loan repayments, there’s always help to find a way out of debt – and the earlier you seek help the better. Find out how to take positive action with our guide.
Sudden changes such as losing your job or going through a family crisis can leave you unable to meet your financial obligations. But whatever the reason you’re facing financial difficulties, there are things you can do to manage your debts:
If you know your loan repayments are likely to become unmanageable in the future, you should try to seek out free debt advice.
When you miss a loan repayment date, you’ll usually get a letter from the loan provider warning you the payment needs to be made – and informing you of any late payment fees or interest charges you will incur. The missed payment will also be noted on your credit report, which could make it harder to take out a loan or credit card in the future.
If you miss several loan repayments, you’ll get a default notice and may face the following if you don’t take any action:
That’s why it’s important to contact the lenders concerned and/or seek free debt advice as soon as possible if you can’t afford your loan repayments.
Drawing up – and sticking to – a budget is a great way to get your finances back on track when you’re in financial difficulty. It will also help you work out how much you can afford to pay towards loan repayments each month without running up more debts.
To create a household budget you should:
Several organisations offer free advice for people struggling with debt. These include:
You can also get face-to-face debt advice from local charities and not-for-profit agencies. Your local council should have details of suitable organisations, or you can use the Money Advice Service’s debt advice locator to find help in your area. Just remember to check it’s free before you start.